11.14.2012

Yet on close examination, the city's decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America's largest state.

San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.
Little by little, over many years, the salaries and retirement benefits of San Bernardino's city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.
Unions poured money into City Council elections, and the City Council poured money into union pay and pensions.

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No single deal or decision involving benefits and wages over the years killed the city. But cumulatively, they built a pension-fueled financial time-bomb that finally exploded.
In bankrupt San Bernardino, a third of the city's 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension. Forty-six retired city employees receive over $100,000 a year in pensions.

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Saying it had little choice, the San Bernardino City Council voted to cut $26 million in spending in an effort to keep the bankrupt city from dissolving and being governed by the county.

The city is already in bankruptcy proceedings and facing a $45.8-million budget shortfall. The $26 million in cuts will help the troubled city stay afloat.

The austerity plan is a required step in the federal bankruptcy process. It freezes vacancies in the Police Department even as the city deals with an increase in violent crime. The Fire Department’s overtime budget also was slashed by 35%.